Martin Lewis has issued a warning over Virgin Media price rises (Image: ITVX)
Money saving expert Martin Lewis has sounded the alarm over a change to the way Virgin Media, as well as other broadband firms, calculate their price rises for 2025.
Speaking on the latest episode of The Money Show Live on and ITVX, Martin explained how a change in the law on phone and contracts has now been put into effect.
It means that mid-contract price rises based on inflation figures are now banned, and instead customers signing up to new contracts or renewing their existing contracts must be told the price rises they face in pounds and pence.
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But, Martin set out that for many customers, their mid-contract price rises will actually be much more than the increases they faced in the old system.
Martin told his viewers: “Firms must now say in pounds and pence before you sign up how the price will rise over the contract.
“So for example is saying new contracts it’ll rise £3.50 per month in April this year and April next year.
“So if you’re paying £25 now, in April you’ll pay £28.50 and then the following April you’ll pay £32, but this is only for new contracts or re-contracting.”
Martin said that if you were already on a contract before the rules changed, you’ll still be liable to pay the above inflation price rises.
He added that if a firm chooses not to invoke a pounds and pence increase, such as which isn’t, if it does a price rise mid-contract, you are allowed to leave penalty-free within 30 days.
But the problem is that ‘it can mean higher price rises’ for some customers, especially those on cheaper contracts.
Martin added: “These are new rules from , they do boost transparency. But. They can mean higher price rises for some.
“Now I in the consultation response said you should put a limit on it that it shouldn’t rise above inflation, they haven’t chosen to do that and we’ve seen the result.
“So look, think about it, a £3.50 increase if you’re paying £20 a month. That’s 17.5%.
“With inflation this year it would only have been 6% so it’s a lot more expensive.
“If you’re on a £60 a month contract, £3.50 is only 6%. So what it means many people on lower contracts and getting cheaper deals are going to see a rise of more than they would have done under the old system with this, and way above inflation.
“So yes it boosts transparency but it doesn’t mean that it’s going to be cheaper, and for some it’s going to be more expensive.”
Those who took out a contract before January 9 will pay an increase of RPI inflation plus 3.9%.
Virgin Media said about its price rises: “We know that price changes are never welcome, but like many other businesses we’re seeing increased costs while investing to keep up with growing demand.
“If you joined or took out a new contract with before 9 January 2025, your price is adjusted based on the UK government’s Retail Price Index (RPI) rate of inflation.
“If you joined or took out a new contract with Virgin Media from 9 January 2025, your price will increase each April by £3.50.”